Oz broadband project a 'white-elephant'

broadband network (NBN) project is one of the ''great all-time white elephants'' and a massive waste of public funds, opposition leader Tony Abbott said, The Sydney Morning Herald reports.

Abbott was responding to revelations that only 4 000 households had been connected to the network so far, with just 2 315 of those using the NBN's fibre-optic cables for communications - numbers that were grossly down on the NBN projection of 35 000 connections for 2011.

Analysts peg the penetration of fixed broadband services in Australia at about 75%, The Australian notes. But, as a percentage of broadband users will always opt for wireless-only broadband, the scenario for customer growth is slim.

"What's driving the industry change is that the fundamental economics are commoditising very quickly," Bell Potter telecoms and media analyst Daniel Blair says. "With the NBN, that will happen even faster.”

Under the deal with the government and NBN, Telstra will progressively decommission its copper-based network and allow NBN to access its pits, manholes and exchanges, and sell some infrastructure. In return, Telstra will receive A$11 billion from the government, Courier Mail states.

However, Abbott questioned whether NBN could achieve the government's goal to expand the network's coverage area to another 500 000 premises this year. "The rollout is massively behind schedule," he said.